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“You try to be greedy when others are fearful.
And you try to be fearful when others are greedy.”
Warren Buffett
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Well. I have been involved in several “stop spending money on those things because it is a waste of money” and “stop parsing out money in nickels & dimes and spend some hundred dollar bills for gods sake” business discussions throughout my career.
Suffice it to say, one of the most challenging aspects of being in business is managing money and how & when you spend your money.
That said. This discussion rears its ugliest head when … uh oh … you can see you are
running out of money.
Let me be clear. Businesses rarely actually run out of money completely. More often than not it is “I don’t have enough money to spend after “x” date.”
This is called ‘spending over time’ budgeting.
This is called ‘wrong way to budget.’
Budgeting should always be based on ‘spend money to make money’ running parallel to the unfortunate business truth that “you actually have to spend money to make money.”
** note: when I say spend money to make money I am not just referring to direct marketing or simple ’cause & effect’ advertising, but rather even if your objective is brand awareness your ultimate objective is to sell shit, i.e., having everyone know you and not buy anything is a non-business model.
I am tempted to refer to my ‘no formula’ post here because I believe every business has an edge just as they <assuming it is actually a good idea> always have an opportunity or opportunities. Using formulas when budgeting expenditures typically does not translate to edges, maximizing the edge nor offer real solutions to drive & create business. Formulas tend to say what has worked in the past which doesn’t often offer real solutions when discussing ‘we are going to run out of money.’
Suffice it to say that when budgets get limited <or you can see a zero balance on the horizon> and when a business comes to grips with the fact it is going to run out of money there are some hard choices to make.
The easy choice? Stretch it out and hope <the business is maintained or some additional funds come your way>. I would be remiss if I didn’t point out hoping is never a good strategy.
The difficult choice? How do I spend it now <or within a specific window of time> to drive up awareness/sales/connections so that I make an impact.
While it sounds flippant to say you have to spend money to make money and it is even more difficult to explain “there is something worse than not having any more money to spend.”
Uhm. What is worse?
Spending the money you did have … poorly.
There may be nothing worse in business than wasting money. And I don’t mean on frivolous expenditures <which is wasteful & stupid> or on ‘legacy programs’ <which is usually wasteful or at minimum ‘less than efficient’>, but actual well intended planning and wasting the money in doing so.
That said. The most common poor budgeting strategy is time based.
“If I don’t budget wisely I will use up my money by <insert some date>.”
Well. That is actually “how can I spread my money out for as long as I can” budgeting. I don’t have enough time to list how many things are wrong, and will go wrong, spending your money this way.
Basically you run the risk of spreading yourself so thin you don’t make any impact which defeats the purpose of spending money.
The purpose of spending money in business? <just as a reminder>
To make money.
But, remember, you have to pull the trigger on spending – having money does you no good if you do not actually spend it. A business should demand money spent to show how it creates money <some high falutin’ marketing experts will toss around “ROI” here>.
In startups it is to receive additional funding.
In some businesses it is that your budget is based on % of sales.
In other businesses it is simply that the business has some financial objective <sales, profit, widgets, etc.> and you are spending to meet and/or exceed it.
And while everyone in business knows this, for some reason, time takes on an extraordinarily high importance in planning. It becomes “I have 12 months to use this money” rather than “how do I spend the money to make the most money.”
Yes.
Sometimes those things coincide.
But more often than not, under the scrutiny of truth, they do not.
I got very lucky early in my career in that I was mentored and worked with some excellent ‘difficult money decision’ business people.
For example. An early difficult money decision.
It was a national brand with a long purchase cycle product <think maybe once every two years for the bulk of their purchasers>and a pretty high seasonal purchase skew where a high % of sales occurred in a three month period and a budget that didn’t support an annual national effort.
The senior brand manager decided to split the country into thirds and only provide significant support to one of the thirds each year <rolling through the nation over a three year period and then starting over>.
<note: there were some promotions and store support aspects and a couple of national cable events to maintain the other regional thirds while the other third’s effort was in place>
Yes. The initial presentation to senior management and sales was harrowing & painful. But we got research onboard and we had a sales projection team and we showed everyone how this would actually increase sales on an annual basis and how much it would net out for the company at the end of the three years and how it would provide a national foundation from which the following three years should see even higher growth projections <it would actually flatten out in years 7, 8 & 9>.
Without going into details the decisions were made to sacrifice inefficient ‘throwing money away spending’ for more impactful ‘spend to make money’ strategy & tactics. It was creative spending to create sales.
Not popular. It looked risky.
And it worked – better than even planned.
From that point on in my career I continued to propose & debate some fairly unpopular expenditure strategies because I was focused on spending money to make money.
Look.
I am not suggesting this is easy. Money & budget decisions can make or break a career. Shit. They can make or break a business.
You get judged on how a budget is spent. And you should. But the judge is often harsh and the verdict can be damning. Because of that judgement, money, and the judgement that comes along with it, can make even the most even keeled business person … well … lose sight of reality and enter into some imaginative world in which dollars get spread out in a way that appears to cover time and yet, in its worst form, does nothing over time or, in its least harmful form, does less than it could over time.
To be clear. A spending over time planning process takes incredible imagination.
To be clear. A spending money to make money is all about reality <sometimes harsh>.
Again.
I am not suggesting this is easy.
It is incredibly hard to have a start up business spend all their discretionary money in a two month period <to get results to point to>.
It is incredibly hard to have a business stop doing all the small efforts for 6
months and do one bigger effort in month 7 & 8.
It is incredibly hard to have a business “go dark” for any stretch of time.
Deciding when to spend and what to spend and face the fact that your plan means you will have used up your money <so there is nothing to use in case it doesn’t work> is incredibly hard.
That said.
I am a business guy.
And I like to increase business <to maintain it>.
And I have a nasty habit of wanting to do the right thing and not the popular thing or the thing that would ‘make the sales people happy’ or ‘look good to the board.’
I like to spend money to make money.





Here is where I bring in ‘out of the box.’ Crucial to effective black box thinking is to stop all the ‘out of the box’ thinking mumbo jumbo and embrace the fact anything you would have considered ‘out of the box’ actually resides inside the black box. Yeah. Inside the box resides all of the out of the box shit you are seeking. Go figure.

However, the retail world (and the internet) is teaching us that possibly we should consider another 3 P’s to the mix – Physical Environment, Process, and People – just to make sure as we check the boxes of foundation thinking we do not miss anything in a world that has become increasingly transparent. I bring up ‘transparency’ because while many people have talked about changing the P’s or adding to the P’s they neglect a valid reason why they believe it should be done (and, no, “it’s a different world” doesn’t count as a valid reason). Transparency, mostly through the internet, has made it significantly more important to provide a more seamless brand message and positioning. To me, adding additional P’s is a means to that end. That doesn’t mean the traditional P’s are any less important, in fact, they may be even more important than they ever have been – it’s just that they may need to be supported in a more radically transparent unforgiving world.
– Color of surroundings and noise levels
ARE the brand. What they say, how they say it and how they act create the overall perceptions of the brand in the target (or their consumers) minds.
situations to be “significantly above market average” on some of the P’s has to be an objective to ensure long term success unless you are low cost all the time. This “significantly above market average” provides the value-add that differentiates a brand/company/store in the marketplace.
Aligning the P’s.








It’s okay because you put in the effort, you worked hard, you did things the right way, you didn’t cut corners, you didn’t demand much, therefore, you want to take a moment and reflect on what YOU “have to show for it all.”





culture is not anything persons do, but anything they do with each other we may say a culture comes into being whenever persons choose to be a people. It is as a people that they arrange their rules with each other, their moralities, their modes of communication.” While I (slightly) hesitate to suggest people, technology (software) and information, each by themselves, are simply discernible bits of something that are actually nothings, I will suggest in a Conceptual Age frame of mind those things are nothing until they actually “do with each other” and collectively create progress. a culture forges them all together into something worthwhile.
whatever they do (and how they think), there is continuous improvement, progress is achieved (for the individual and the business), quests are pursued and everyone feels a sense of meaning in having contributed. That is possibly the best summary of what I envision a Conceptual Age Organization is.
While the cloud represents an almost limitless pool of ever-growing knowledge and data, I would be remiss if I didn’t point out that the cloud, in and of itself, can be just as stupid, if not stupider, than any one individual. More knowledge, used poorly, simply makes one stupider rather than smarter. The collective knowledge is only as good as who uses it.
individual(s) collaboration to command the highest order of value against emergent opportunities. And, in general, technology creates organizational stupidity when the culture does not embrace it’s thinking potential and simply use it as tools to ‘do’. The smartest organizations will be the ones in which there is a strong culture attracted to the benefits of technology and, specifically, an Intelligence Based Software system constantly feeding them predictive and emergent knowledge to assist them thinking conceptually about the business at hand.
Currently business gathers gobs of information, knowledge and data and generally don’t really know what to do with it (effectively). That’s why people lean in on generalizations which drive towards superficial decisions. They know they have something important but, more often than not, just aren’t sure what they have.
Business doesn’t really make it easy for us. It kind of encourages us to be sure to focus on big stuff, and little stuff, at the exact same time <all the while encouraging us to focus on one thing and do it well>. That said. It rewards ‘big’ at an exponentially higher level while penalizing at an exponentially higher level for small (even if you do it well consistently).



Early in your career you are demanded (pressured) to show you can get things done. Results is the key to unlocking pay, respect, promotion and even some independence (getting your boss of your back). I would be remiss if I didn’t point out that early in your career getting things is mostly tied to some specialist role (although if you pay attention you learn that getting things done well incorporates a lot of generalist, and relational, aspects).
rewarding. In fact, being a spirited specialist can be incredibly rewarding. I would argue to be a spirited specialist one would be a craftsperson with their skill. I believe it is Jackson & Jackson, “How to Speak Human”, who pointed out the shift from craftsmanship to professionalism (where we went from being a profession, and having a profession, to creating an industry of professionalism. This distinction is most likely the difference between spirited specialist and spiritless specialist. I am a self-proclaimed generalist, loving knowing some about many things, and yet I can be quite envious of the specialist who sees their specific skill as a craft and wield it as a craft. Ponder.
If you decide impact is more important than results, you are in for a rocky road. If you don’t believe me, just watch Alain de Botton’s Tedtalk
behavior. But we need to get a grip on how we view results. We need to understand that results are often a means to an end – the end being impact. Maybe we should ponder Viktor Frankl from Mans Search for Meaning:
Yeah. As of today, I call for people to stop talking about business Purpose (or Purpose over Profit) and speak of Principles over Purpose.
purpose to be shitbags. Ok. Shitbags that sell things and make money. So their purpose provides affirmation, and meaning, tied to results (and being a shitbag to do so). The people do have meaning, albeit a warped one, but a meaning nonetheless. In fact. I could argue this type of meaning is so easy for 99% of people to grasp, results/achievement/proof based, that, if asked, most people would be quite comfortable with this. It is a quasi-impersonal calculation of meaning which permits people to keep some larger questions about Life, and their true meaning, at arm’s length.

principles ‘are statements denoting fact or generality which are universally or widely considered to be true and fundamental’ they, in fact, have a great range of meaning. ‘Principles’ most often refers to fundamental, basic, propositions of some system or of conduct.



